Sanctioned compromise schemes may compel vacant possession immediately, while separate damages claims require ordinary civil proceedings.

A sanctioned compromise scheme under the Companies Act can be specifically enforced to require immediate surrender of vacant possession where the obligation to vacate forms part of the binding arrangement, and prior payment by the company is not a condition precedent unless the scheme says so. The occupant therefore had no continuing right to remain in the bungalow, and vacant possession was treated as necessary to facilitate sale. By contrast, a separate claim for damages was not adjudicated under sections 391 and 392, and section 446 was inapplicable absent a winding-up order or provisional liquidator. The monetary claim had to be pursued in the ordinary civil forum.

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Issues: (i) Whether the scheme of arrangement sanctioned under the Companies Act could be enforced to direct delivery of vacant possession of the bungalow to the company. (ii) Whether the claim for damages could be adjudicated in proceedings under the Companies Act and, alternatively, under the winding-up jurisdiction.

Issue (i): Whether the scheme of arrangement sanctioned under the Companies Act could be enforced to direct delivery of vacant possession of the bungalow to the company.

Analysis: The arrangement required the occupant to hand over vacant possession and fixtures and furniture forthwith. The obligation to give up possession was treated as part of the binding compromise, and the company's obligation to pay the agreed sum did not make simultaneous payment a condition precedent. The Court held that the scheme could be enforced under the company jurisdiction and that the occupant had no surviving right to continue in possession. The property was also being sold, and vacant possession was considered necessary to secure a better sale price.

Conclusion: The company was entitled to immediate delivery of possession, and the occupant was directed to be dispossessed.

Issue (ii): Whether the claim for damages could be adjudicated in proceedings under the Companies Act and, alternatively, under the winding-up jurisdiction.

Analysis: The claim for Rs. 2,94,000 was treated as a damages claim not suitable for determination in proceedings under sections 391 and 392. Section 446 was held inapplicable because no winding-up order had been made and no provisional liquidator had been appointed. The company was left to pursue its remedy in the ordinary civil forum.

Conclusion: The damages claim was rejected in these proceedings, and no jurisdiction was assumed under section 446.

Final Conclusion: The application succeeded only to the extent of enforcement of possession under the compromise scheme, while the monetary claim was left to be pursued separately.

Ratio Decidendi: A compromise scheme sanctioned by the company court can be specifically enforced under sections 391 and 392, and a party cannot insist on prior payment where the scheme requires immediate surrender of possession; a damages claim outside that scheme cannot be tried under section 446 unless winding-up conditions exist.

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